This earnings season, Wall Street analysts expect S&P 500 EPS growth up 12% year-over-year in 1Q17, marking the longest period of earnings acceleration in over five years as well as the highest growth rate. The trend remains positive for several reasons.
In the U.S., a broad geographic range of home price appreciation may drive improved consumer spending — and the economy.
The most innovative companies grow their sales—and their stock prices—faster.
Historically, an inverted yield curve has been viewed as a strong indicator of a potential economic recession. Based on this signal, it appears that a recession is unlikely to happen anytime soon.
A historically wide disparity exists between equity and bond valuations, setting the stage for three potential scenarios. Under any of these scenarios, we believe, equities would outperform.
Everyone knows that saving for retirement is critical. However, many people may not be aware that a higher credit score can be an important component of an investment strategy and a sizable contributor to a nest egg.
The percentage of active-fund assets outperforming the S&P 500 moves in cycles with outperformance recently hitting a trough. There are reasons to expect improvement.
Recent low correlations of non-U.S. stocks to the S&P 500 Index add to the attractiveness of the developed foreign market and emerging market categories.
Job openings are at their highest level in more than 16 years and outpacing new hires. A strong labor market is the underpinning of a solid economy—and may lead to incremental investment opportunities.
Solid economic data and hopes for fiscal stimulus have led to soaring optimism. As a result, valuation disparities may exist within equities, providing investment opportunities.
“Wide-moat” companies have strong competitive advantages including the power to maintain large profit margins. A key attribute of wide moat companies is their focus on innovation.
Many view the Dow hitting 20,000 as a symbolic or psychological breakthrough. However, after two years of stagnation, S&P 500 earnings have now passed a more meaningful milestone. Because we believe earnings drive the market, an earnings per share breakout should support stock price records.
Growth, synergy, scale and diversification are among the reasons why many large companies engage in mergers and acquisitions. Smaller companies are frequently their targets.
A recent survey among small businesses points to a surge in confidence following the recent U.S. presidential election. This could continue well into 2017 due to expectations for lower taxes and less regulation brought forth by the new administration.
As U.S. equities continue to hover at all-time highs, investors are continuing to buy. Yet, some stocks have more room to move up than others—specifically the growth stock category, whose premium to value stocks is currently near its lowest level in almost four decades.
Some investors view stock market highs with excitement, others with trepidation. When stocks are higher, many wonder what to do. However, if you have a long-term time horizon, you can put your money to work as the odds of losing money decrease over time.
The underperforming Healthcare sector is likely poised for a turnaround. The last time the sector’s valuation discount to the market was this wide, it outperformed the S&P 500 by over 700 basis points annually over the subsequent five years.
Price-to-earnings ratios for the traditional growth sectors—Technology,
Health Care, and Consumer Discretionary—are currently discounted
materially relative to defensive sectors such as Utilities, Consumer Staples, and Real Estate.
90% of stock market returns over a 10-year period is attributable to
starting price-to-earnings (P/E) ratios. Buying low and selling high in
terms of P/E has historically driven returns.
Some proposals by the new administration and House of Representatives Republicans lower corporate tax rates, making U.S. tax rates more in line with global peers. How can you benefit as much as possible from the potential change?
One of the largest transfers of wealth—an estimated $30 trillion over the next few decades—will occur as Baby Boomers pass money to younger generations. What do you think the younger generations value?
recently, the acute search for yield had driven more and more money
into fixed income. However, expectations around fiscal stimulus owing to
the U.S. election drove up growth and inflation expectations which seem
to have resulted in a Great Rotation from bonds to equities.